California Labor Commissioner Angela Bradstreet and Attorney General Edmund G. Brown Jr. today took legal action against a Delaware company for failing to pay approximately 300 California janitorial workers proper wages and engaging in unfair business practices. Damages being sought could exceed $5 million.

The joint lawsuit against Excell Cleaning & Building Services, Inc., and MO Restaurant Cleaning of California, Inc., seeks damages for unpaid wages and penalties going back to 2003. The two companies had contracts to provide janitorial services at various restaurants in Los Angeles, San Diego and Orange counties.

“This case is an example of gross exploitation of employees and we will not tolerate such unconscionable behavior,” said Labor Commissioner Angela Bradstreet. “This suit should serve as a message that these kinds of activities will be vigorously pursued. Fighting the underground economy and preserving a level playing field for workers and businesses is one of my top priorities.”

An investigation by the labor commissioner in late 2006 found that Excell and MO Restaurant Cleaning failed to pay employees wages to which they were entitled on regularly established paydays. In addition, they also failed to pay overtime and/or double-time and did not provide meal and rest breaks as required by state labor law. Employees were required to work from approximately 11:30 p.m. until 9 a.m., seven days a week, and were often paid a flat rate of $50 per day.

The investigation also revealed that employees were being misclassified as independent contractors to avoid paying nearly $250,000 in payroll taxes. This misclassification also resulted in workers being paid less then minimum wage and not being paid overtime.

“We believe these activities were deliberately designed to take advantage of workers who had few resources to fight for their rights,” added Bradstreet. “The defendants not only violated the rights of these workers, but they gained unfair advantage over their competitors for a sustained period of time.”

Under state labor law, all wages earned by any person are due and payable twice a month on days established in advance by the employer as regular paydays. All California employers are also required to pay minimum wage, overtime for all hours worked in excess of regular hours, double time rates for work in excess of 12 hours in one day, or any work in excess of eight hours in the seventh day of a work week, and pay final wages due to employees at the time of termination.

In addition, employers are required to provide itemized statements, permit 10 minute rest breaks for every four hours of work, and provide a meal period of not less than 30 minutes for the first five hours of work unless the work period is not more than six hours.

To learn more about the functions of the California Labor Commissioner, visit the Department’s web site at www.dir.ca.gov/dlse.